Following the opposition of Ministry of Finance budget director Amir Levy and various MKs to Cellcom Israel Ltd.'s (NYSE:CEL; TASE:CEL) acquisition of Golan Telecom Ltd., Minister of Finance Moshe Kahlon is also expressing his opposition. Kahlon sent a letter to Antitrust Authority acting director general Adv. Ori Schwartz calling on him not to approve the deal.
"The Ministry of Finance opposes approval of the deal, and warns that granting approval for this acquisition would constitute a severe blow to competition in the cellular market, and cause a rise in prices. The acquisition of Golan Telecom by an existing operator, which would result in a cellular company with a market share of nearly 40%, and would deal a critical blow to the existing competition in the market, should not be approved. Detracting from competition in the cellular market will be a great tragedy. A merger of Golan Telecom and Cellcom is a serious mistake. Prices of calls will soar to hundreds of shekels a month, instead of the tens of shekels a month the public is paying now. Approval of the merger will bring us back to the days when competition was lacking, and consumers will be the victim of this process," Kahlon wrote.
The Minister of Finance added, "The entry of Golan Telecom into the market was made possible by a tender in which far-reaching concession on terms were granted to encourage the entry of new operators and competition in the market. Thanks to Golan Telecom's entry into the market, household cellular expenses were cut by hundreds of shekels a month, with the knowhow and technology reaching all segments of the population at convenient prices with high quality.
According to Kahlon, "Professional parties in my ministry recently conducted an extensive survey covering the economic aspects of the acquisition of Golan Telecom by an existing operator. I believe that the right thing for the market and the consumers is for Golan Telecom to remain in the market as an independent operator without ownership by an existing operator. I ask you to meet with professionals from my ministry before formulating your position."
Published by Globes [online], Israel business news - www.globes-online.com - on November 5, 2015
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